The spread in cryptocurrency trading is the difference between the bid price (the highest price a buyer is willing to pay) and the ask price (the lowest price a seller is willing to accept) for an asset at any given moment. The spread represents an implicit trading cost — when you buy at the ask and sell at the bid, the spread is the minimum movement the price must make before your trade becomes profitable.
Spreads vary based on: Liquidity — high-volume pairs like BTC/USDT have very tight spreads (often $1–$5); low-liquidity altcoin pairs can have spreads of 1–5%; Market conditions — spreads widen dramatically during high volatility, news events, or low-trading-hours; and Exchange type — decentralised exchanges (DEXs) typically have wider spreads than centralised exchanges due to lower liquidity.
On centralised exchanges, the spread is visible in the order book. Market makers — traders who place limit orders on both sides — earn the spread as profit while providing liquidity. Market takers (those who execute against existing orders) pay the spread. Active traders minimise spread costs by trading only high-liquidity pairs, using limit orders rather than market orders, and avoiding thinly-traded markets.
Example: Bitcoin is showing a bid of $62,450 and an ask of $62,455. The spread is $5. If you buy at $62,455 immediately via market order, price must rise above $62,455 before you profit, making the $5 spread your immediate “cost” of entry.
Learn more: Investopedia — Bid-Ask Spread Explained
